Vodafone Idea (Vi) has said it will issue shares worth 24.58 billion rupees ($294.3 million) to network vendors Ericsson and Nokia.

The Indian telco said it's part of the company's strategy to clear its dues.

In a statement, Vi revealed it will issue 1.66 billion shares to the two vendors, with 1.03 billion shares going to Nokia Solutions worth 15.20 billion rupees ($181m), and 633 million shares to Ericsson India worth 9.38bn rupees ($112m).

It means that Nokia will have a 1.5 percent stake in Vi, while Ericsson will own 0.9 percent of the telco.

"Vi is all set to participate in the industry growth with the right investments to expand its 4G coverage and offer 5G experience to its customers while remaining focused on its execution capabilities," said Vodafone Idea CEO Akshaya Moondra.

Vi's decision to sell the shares is related to its ongoing financial issues.

The company, which was created in 2018 following the merger of Vodafone India and Idea Cellular, has struggled for some time, with the debt-laden operator struggling to pay its dues with its vendor partners after it was saved from the brink of collapse by the Indian government in 2022, which acquired a 35.8 percent stake in the company.

The financial issues have meant that Vi has fallen behind on payments to its tower and equipment vendors, owing 135 billion rupees ($1.6bn).

Of this, the telco owes Indus Towers, part-owned by rival telco Bharti Airtel, $1.2 billion, leading to the company's chairman Sunil Mittal warning Vi to pay up or lose access to its towers and fall further behind on 5G.

Unlike the other two main telcos in the country, Airtel and Reliance Jio, Vi is yet to launch a 5G network.

Moondra said in January that it's about "six to seven months away" from launching the service.

Vi recently held a $2.16 billion follow-on Public Offering (FPO) in India through a sale of new shares.

It said at the time that the funds would be used to expand its 4G network and launch its 5G network. The telco has fallen behind in the country's 5G race, with Airtel and Jio dominating the market.